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PARITY COMMISSION FOR PAY AND PRICES

About

One of the institutional bases of Austria's system of social partnership, which serves as a forum for formulating and implementing the economic and social policy agreed between the social partners and government. It is composed of central representatives from the Federal Chamber of Labour (BAK), the Austrian Trade Union Federation (ÖGB), the Economic Chamber of Austria (WKÖ), the Standing Committee of Presidents of the Chambers of Agriculture (PKLWK), the Federal Chancellor and the Ministers for Economic Affairs, for Employment and Social Security and for Agriculture and Forestry.

Unlike most comparable corporatist institutions for economic and social macro-concertation in other European countries, the Parity Commission is not statutorily regulated; it is an informal institution founded solely on the voluntary co-operation of the actors concerned (see informal rules in industrial relations). It is notable that only the four social partners (BAK, ÖGB, WKÖ and PKLWK), not the government representatives, have voting rights within the Commission. This evidences the social partners' shared interest in a voluntary system of regulating industrial relations, free from any state intervention, which underlay the creation of the Parity Commission in 1957 as an instrument of voluntary incomes policy, together with two subcommittees: the Subcommittee on Pay (Lohnunterausschuss) and the Subcommittee on Prices (Preisunterausschuss). Additional subcommittees were created in 1962 in the form of the Advisory Council for Economic and Social Affairs (BeiratfürWirtschafts-undSozialfragen) and in 1992 in the form of the Subcommittee on International Issues (UnterausschussfürinternationaleFragen). In the event of failure to reach agreement within these subcommittees, the Commission itself functions as a second instance for them. Decisions on all issues are taken on the basis of the principle of unanimity (Konkordanz). The creation of the four subcommittees reflects lasting changes to economic and social policy: the need for corporatist incomes policies in the heyday of Keynesianism; the increasing importance of “technocratic” approaches for economic and social policy; and growing economic internationalization. The latter has reduced the scope for and effectiveness of corporatist price control, and in 1992 the social partners agreed to limit the control function of the Subcommittee on Prices to a few prices in the sheltered sector and to focus its attention, instead, on competition issues. And since from the early 1980s onwards national co-ordination of collective bargaining has been based on the pay framework-setting role of the metal industry, pay control by the Parity Commission is likewise now a purely formal procedure of no practical relevance. The Advisory Council for Economic and Social Affairs, which compiles studies on economic and social policy issues containing analyses and associated recommendations for the government and public authorities, is of continuing importance. The Subcommittee on International Issues provides a means for the four social partners' organizations represented in the Commission to discuss international issues and co-ordinate the policy they present in supranational institutions. This mainly concerns aspects relating to European integration.

Overall, therefore, at subcommittee level the focus of activity has shifted from the formulation and implementation of incomes policy to the development of common approaches and strategies; this work is mainly undertaken by the social partners' experts. At central level the practice is one of discussions between the leaders of the social partners' organizations. These discussions are completely informal; the range of topics dealt with is unrestricted and they take place on an optional basis, i.e. whenever any issue of economic and social policy proves both important and controversial and therefore needs to be discussed in detail at central level. Given the informality of these central discussions and the transfer of the incomes policy co-ordinating function to the pattern-setting role of the metal industry, as a system of voluntary bipartite macro-concertation Austria's social partnership extends far beyond the Parity Commission's narrow institutional framework. See also pay and incomes policy.))